Wide flange beam (WFB) prices are out for August shipments, and the $65 /nt price increase from Nucor-Yamato came as no surprise to buyers.
Nucor-Yamato recently announced to customers that it will increase its raw materials surcharge (RMS) for August shipments to $443 /nt ($22.15 cwt. or $488 /mt), representing an increase of $65 /nt ($3.25 cwt. or $72 /mt) from the company's July RMS. The company will leave base prices at July levels, resulting in a net increase in transaction prices of $65 /nt for August beam shipments.
For August, domestic prices for standard-sized beams (ASTM A992, W10 x 10, W18 x 6, W24 x 7) are at $57.60 cwt. ($1,270 /mt or $1,152 /nt) FOB mill.
Since the beginning of the year, domestic beam mills have been raising prices continuously. The year 2008 began with a mild $25 /nt increase in January, followed by a larger $65 /nt increase for February shipments. In March, the domestic mills kept prices stable, though they raised them by $20 /nt in April, followed by a huge $110 /nt in May, and by another $50 /nt in June.
The market grew even more interesting come July. Prior to July, shredded scrap prices had increased each month, resulting in increases to Nucor's RMS. In July, however, shredded scrap prices dropped by $25 /lt, resulting in a $25 /nt decrease in Nucor's RMS. Buyers felt that maybe there would be some relief from the constant price increases, but due to other factors, such as strong demand and tight supply, Nucor pushed base prices up $55 /nt, which resulted in a $30 /nt increase in the transaction price. Including the $65 /nt increase for August, the US domestic beam market has seen a total of $365 /nt in increases this year, and it is likely that more are to come.
Demand for WFB is very strong, especially for larger sizes that are used in the commercial construction market, which is still somewhat strong. Adding to the tightness in the market is the lack of imports. A year ago, competitively priced imports from Asia were seen in the US, and though import offers were much higher priced than offers from domestic mills, they were still an option. Now, however, there are no imports in sight, at least not at attractive numbers. The WFB markets in other parts of the world are willing to pay higher prices than the US is, so imported material is going elsewhere.
Going forward, it looks like prices will continue on their upward trend, at least in the short term. Imports are not expected to pick up any time soon, and domestic demand won't be faltering in the near future either, keeping supplies tight.
Nucor's rolling schedule demonstrates (for sizes ASTM A992, W10 x 10, W18 x 6, W24 x 7) the tight US market conditions. Order books for the seventh cycle are now all closed, even for rollings well into October. The next proposed bookings are for December, and the company is taking orders on a controlled order entry basis only.